With all the worrying going on over the ominous prospect of a Central Bank Digital Currency (CBDC), it’s just occurred to me to wonder: What is the state of the legal tender law?
We know – hey, it’s printed on every BLEEP!ing Federal Reserve Note – that federally approved physical currency is “legal tender for all debts, public and private.” The interpretation of that provision in the law is that no level of government, and no private entity, can refuse those FRNs in payment of a debt once that debt has been duly contracted. That last proviso allows retailers to decline cash payments at their discretion. The logic is that until the retailer (or his representative) agrees to your proposed purchase of the goods in your wagon, the debt has not been “duly contracted.” Somewhat ironically, he agrees to contract it by accepting the proffered payment.
Governments are enthusiastic about CBDCs for several obvious reasons. Yet as the law stands, it would be every retailer’s option to refuse payment in them, just as it’s the retailer’s option to insist on cash, or decline certain credit cards, if he chooses. To compel the acceptance of CBDCs would remove that option. But to give it teeth, the law would have to forbid other forms of payment – i.e., it would have to outlaw barter.
Instead of having a “legal tender” of federally approved banknotes and little metal slugs, we would have a state of affairs in which proffering anything else in payment would be illegal.
I haven’t heard anything about such a proposal. Have you, Gentle Reader? Granted that it would be effectively impossible to enforce, that’s the case with many other laws, whether federal, state, or local. For instance, there are laws on the books in every state forbidding adultery, sodomy, and fornication. To the best of my knowledge, no state enforces any of them today.
The point of deliberately enacting lots of unenforceable laws is so that if the State wants a pretext for persecuting you, a pretext is guaranteed to be on the books somewhere. (Cf. Harvey Silverglate’s book Three Felonies A Day.) Combine such laws with “snitch programs” that reward private citizens for reporting on their neighbors. What sort of social-political environment would we have?
It’s time for a little research. And a few more purchases of gold and silver, I think. Back later.